According to recent 2002 estimates, the yearly cost of diabetes was approximately $132 billion. The burden of diabetes is considerable, particularly for ethnically diverse populations. Disease management programs that focus on self-management education have been effective in improving metabolic control. Accordingly, the American Diabetes Association clinical care guidelines stress the importance of metabolic control to prevent complications and improve quality of life for persons with this disease. Unfortunately, these advances have not resulted in widespread acceptance into clinical practice. Therefore, we propose translational research to evaluate telemedicine technology using interactive video conferencing (Diabetes TeleCare) as a novel means to increase the availability of health professionals in rural communities for the effective delivery of a diabetes self management education program and as a means to provide retinal screenings in the primary care setting. Our aims are to 1) develop and implement a 12-month intervention, Diabetes TeleCare to improve adherence to diabetes clinical care guidelines and improve diabetes control in two community health centers located in ethnically diverse, rural and medically underserved communities, 2) conduct a one-year randomized clinical trial (RCT) of 200 patients to formally evaluate the effectiveness of Diabetes TeleCare compared to Usual Care in a sample with >60% African-Americans, and 3) determine the cost-effectiveness and satisfaction of Diabetes TeleCare compared to Usual Care. Participants are recruited from two community health centers in rural South Carolina and randomized according to a patient randomization schedule. Diabetes TeleCare (a structured curriculum) is delivered by a team consisting of a registered nurse/certified diabetes educator (RN-CDE) and an experienced registered dietitian, with support by other health professionals who are linked by interactive video conferencing to participants (single and group) in rural health centers at distant locations. The primary outcomes are measures of metabolic control (A1c, lipids), blood pressure, and use of the telemedicine-facilitated retinal screening capacity. Secondary outcomes include satisfaction, quality of life, health beliefs, and knowledge. The economic analysis will include an assessment of resource utilizaton, cost, and health utilities. In addition, incremental reductions in costs per A1c and the estimated lifetime cost-utility of Diabetes TeleCare compared to usual care will be determined. Telemedicine may be an effective alternative to traditional health care delivery systems resulting in improved diabetes education and control.